How to Clear Old Debts

Sometimes we struggle and sometimes we lose it all, but at some point many of us wonder if it would just be easier to start over with our financial lives and do things better the second time around. Wiping the slate clean is expensive in terms of legal fees and a huge hit on your credit rating. You might not be able to get a bank account for awhile and buying a house or car in the following years would be near impossible, but if you’re ready to pull your hair out, it might be time to throw in the towel.

Bankruptcy

Your first step is to start bankruptcy proceedings. Learn how to declare bankruptcy and begin working through the required steps. You might be forced to try setting up repayment plans for your debts. If you can find a system that works, you’ll be better off in the long run paying off something rather than wiping it all away, but any form of bankruptcy will be a huge hit on your financial life.

Stop Collections and Foreclosure

Once you’re in the process of declaring bankruptcy, speak with your lawyer about stopping other negative proceedings such as repossessions, foreclosures and the many collection calls you might be receiving from unpaid creditors. Figuring out how to stop collection calls alone might bring you peace of mind just because the phone will stop ringing while you work to find a solution.

While there are legal means to put foreclosures and collection calls on hold, you won’t be able to do away with them forever until you work out a repayment plan or formally discharge a bankruptcy and wipe away all your debts.

Starting Over

Once you’ve set up a repayment plan or have had everything wiped away, you’re free to start over. You won’t be able to get credit for a long time, but that is okay as you don’t truly need it to pay bills and live a happy life. Find a bank willing to work with you and deal with cash. Pay your bills on time and don’t give in to the temptation to borrow money. When you start feeling the urge to buy something on credit, learn to walk away. You are one of the few who is able to truly start over, you’d do well to make this a truly good start.

Easy Step By Step

• • Organize your debts and financial obligations to get a clear picture
• • Speak with a bankruptcy lawyer to make a plan of action
• • Use legal proceedings to stop collection calls, foreclosures and repossessions
• • Keep your financial transactions clean going forward

Warnings, Advice, and Suggestions

Bankruptcy should be a measure of last resort. It’s become harder to wipe away debts through bankruptcy in the last few years, so do what you can to negotiate payments with your lenders before resorting to formal bankruptcy.

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